compiz freezes frequently on i965, needs reboot

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Binary package hint: compiz

After a recent upgrade of xserver-xorg-video-intel (current version 2:2.6.3-0ubuntu9.2) and compiz (current version 1:0.8.2-0ubuntu8.1). My Lenovo X61 laptop freezes every once in a while and needs a reboot to fix. The keyboard gets completely disabled but the mouse moves freely. Following is relevant output from lspci-vv. I have currently disabled compiz. Thanks.

00:02.0 VGA compatible controller: Intel Corporation Mobile GM965/GL960 Integrated Graphics Controller (rev 0c)
 Subsystem: Lenovo Device 20b5
 Control: I/O+ Mem+ BusMaster+ SpecCycle- MemWINV- VGASnoop- ParErr- Stepping- SERR- FastB2B- DisINTx+
 Status: Cap+ 66MHz- UDF- FastB2B+ ParErr- DEVSEL=fast >TAbort- <TAbort- <MAbort- >SERR- <PERR- INTx-
 Latency: 0
 Interrupt: pin A routed to IRQ 2298
 Region 0: Memory at f8100000 (64-bit, non-prefetchable) [size=1M]
 Region 2: Memory at e0000000 (64-bit, prefetchable) [size=256M]
 Region 4: I/O ports at 1800 [size=8]
 Capabilities: <access denied>
 Kernel modules: intelfb

00:02.1 Display controller: Intel Corporation Mobile GM965/GL960 Integrated Graphics Controller (rev 0c)
 Subsystem: Lenovo Device 20b5
 Control: I/O+ Mem+ BusMaster+ SpecCycle- MemWINV- VGASnoop- ParErr- Stepping- SERR- FastB2B- DisINTx-
 Status: Cap+ 66MHz- UDF- FastB2B+ ParErr- DEVSEL=fast >TAbort- <TAbort- <MAbort- >SERR- <PERR- INTx-
 Latency: 0
 Region 0: Memory at f8200000 (64-bit, non-prefetchable) [size=1M]
 Capabilities: <access denied>